Cadence Capital Investments, the Colorado-based retail developer that is building a posh three-story Gelson’s in Hollywood, acquired a half-acre of land in Santa Monica for another retail development, The Real Deal has learned.
The firm, which has an office in Los Angeles, acquired the parcel at 2919 Wilshire Boulevard for $10.5 million, or roughly $470 a square foot for the land in a sale that closed earlier this month. The sellers — Blackstone Capital Group, Century West Partners and UDR — wanted to redevelop the site as a mixed-use residential project, but failed to get approvals.
Cadence is focused solely on retail, though specific plans have not yet been filed, said Patrick Wade of CBRE, who represented both the buyer and the seller in the sale.
The site is home to a 5,000-square-foot storefront occupied by Jerry’s Liquor. The liquor store has just over a year left on its lease. When it’s up, the store will likely be demolished to make way for the redevelopment, Wade said.
The broker said the site saw dozens of offers. Retail properties in Santa Monica with leases expiring are rare. Cadence was able to bid high by calculating the $470-a-square-foot land price into its pro forma based on the anticipated income from the redevelopment, rather than the existing tenant.
“It’s definitely one of the more aggressive land values for unentitled land,” Wade said.
Fourth-quarter asking lease rates for retail properties in West Los Angeles jumped 6.9 percent to $7.16 a square foot a month, from $6.70 in the prior quarter, according to CBRE data.
CBRE’S Alex Kozakov also represented the sellers group. Kozakov, Wade and Brandon Beauchemin represented Cadence.